Your credit could be at risk during COVID-19. Here’s how to protect it.

Nicole Bostic’s dog training business in Tacoma has collapsed in the aftershocks of COVID-19.

“I’m not making any money, I have no income – zero whatsoever,” says Nicole.

Now her credit is at risk.

“I pay everything on time: taxes, credit cards, everything. This is the first time I haven’t been able to,” says Nicole.

I’m hearing from consumers with good financial histories who are having the limits on their credit cards slashed.

“I had like ten thousand and then they brought it down to seven thousand,” says Nicole.

Ted Rossman, a personal finance expert with creditcards.com, says this is all about the lessons companies learned from the last economic crash.

“And they remember in the great recession, when at its peak, more than 10 percent of credit card bills went unpaid,” says Ted.

So here’s what you need to do:

“I’m seeing lots of credit card issuers, for example, giving people payment waivers – sometimes without interest – maybe lowering your interest rate, maybe waiving other fees like annual fees and late fees. The point is: help is available, you have to ask for it,” says Ted.

Banks are also targeting dormant cards. If you have a card you haven’t used for a while, you should make a purchase with it now.

“The worry is, what if that card springs to life with charges from somebody who lost their job all of a sudden? They’re using the card, they might not be able to pay it back,” says Ted.

Credit issues go beyond cards.

Lori Moran was looking at getting a forbearance on the mortgage for her Tulalip home, allowing her to put payments off until later.

But the forbearance paperwork says, “you will become delinquent on your mortgage and your credit score may be impacted.”

“It says right in bold letters: “adversely effect your credit score.” And you can’t get anywhere in life without a good credit score!” says Lori.

But that lender’s paperwork is wrong. A Forbearance shouldn’t impact your credit.

“At least for mortgages they back, which is most, the lenders can’t do this lump sum repayment thing,” says Ted.

Eligible homeowners can suspend monthly payments for up to twelve months, and their mortgage servicer is obligated to work with them to hammer out a repayment plan.

Most renters, on the other hand, won’t have that option after the moratorium on evictions ends June 4, says Becky House from credit counseling group American Financial Solutions.

“If you can’t make the full rent payment, at least make partial payments so you are not getting so far behind and at the end of that moratorium you’re going to end up being evicted with this bill of unpaid rent,” says Becky.

If you end up in court with an eviction, that can impact your credit and your ability to get housing in the future.

Nicole, the dog trainer in Tacoma, called her mortgage lender and her credit card company. She will not have to make any payments for another month. But she still has fear for the future after applying twice for unemployment in April and finding out her case is in adjudication.

“I’ve depleted my savings, my business checking only has $46 in it, and I’m maxed out on credit,” says Nicole.

Nicole also got a break on her car loan. After proactively reaching out to her lender, she got a month off and could get even more if she qualifies.

If your finances have been affected, you should also ask your lenders to place a disaster code on your credit report. Tell them it’s because the pandemic. If you do miss payments, if will let future lenders know why.